A Case Study On Gome's Financing Method

Choosing a proper financing method is not only crucial for enterprises,but also important for maintaining national economic and financial stability.Proper financing methods can promote the development of enterprises,and the development of enterprises is the cornerstone of the development of national economy and finance.Gome,one of Chinese home appliance retail chain industry leading enterprises,is the first enterprise of household electric appliances industry in China to adopt the "financial" mode,which promoted the innovation of the financing way and the management pattern of Chinese home appliance chain enterprises.Therefore,there are certain similarities between the financing methods of Gome and the other home appliance chain enterprises.This paper tries to take the path of normative research to analysis the financing methods of Gome,which analyses the current financing structure of the Gome,and puts forward some proposals to the household electric appliances industry financing on the basis of this case.From the theory aspect,this paper explains the meaning of financing methods,classification of financing methods,and classical theories on financing methods.While analyzing the case of Gome,this paper expounds the background of household electric appliances industry and the current situation of the financing way of this industry,introduces the history of Gome and the current financing situation of it.In the studying of Gome's financing methods,we could found that Gome finances money mainly through commercial credit financing method,IPO and issuing bonds.Discussions on the advantages and disadvantages of Gome's various financing methods could provide guidance for the other enterprises in the household electric appliances industry.Through the analysis of the financing methods of Gome,it is found that Gome relies too much on commercial credit financing.Although commercial credit financing can provide interest-free funds for enterprises,it is easy to worsen the relationship between enterprises and the suppliers,which is not conducive to the operation and management of enterprises.Therefore,it is suggested that Gome could adjust the current financing structure,expand the financing channels,reduce the dependence on commercial credit financing method,use similar financial mode moderately,relax the tense relationships with its suppliers.